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Home » Technical Analysis » Daily Report on October 12, 2016

Daily Report on October 12, 2016

Posted by Option_Banque in Technical Analysis - October 12th, 2016 10:57 am GMT

Daily Report on October 12, 2016

Asian shares declined for a fourth day after a Wall Street’s sell-off on Tuesday. Not only did a stronger dollar weigh on multinational companies, but a gloomy start of the earnings session knocked down investor confidence in stock markets. The Dow Jones fell 1.09%, to 18,128.66, the S&P 500 lost 1.24%, to 2,136.73 and the Nasdaq Composite dropped 1.54%, to 5,246.79, led by 11.4% decline in Alcoa’s shares.

Lower oil prices were also one of factors dragging down equity markets yesterday. Crude oil finished lower on Tuesday amidst concerns that Russia will not be fully committed to an OPEC deal to curb oil output, even after Russian President Putin had pledged to join the cartel to re-stabilize the oil market.

Topping up to comments by Russia’s Energy Minister Alexander Novak that his country is currently only considering output freeze option, not production cut, Igor Sechin – the Executive Chairman of oil giant Rosneft – said his company will not trim or freeze output as part of a possible agreement with OPEC.

All major Asian benchmarks ticked lower today. The MSCI Asia Pacific Index dropped 0.4%. Hong Kong’s Hang Seng Index and the Shanghai Composite Index declined 1.1% and 0.3%, respectively. The British Pound bounced back 1.5% against the greenback on the news reported by Bloomberg that Prime Minister Theresa May had accepted the participation of Parliament in the decision on when to trigger the two-year period of negotiation with the EU regarding the departure of the U.K.

Britain’s Parliament will debate on Wednesday to gain the right to “properly scrutinize” the government’s plan for leaving the EU before PM May begins formal talks. If it wins, the triggering of Article 50 of the Lisbon Treaty, which starts the exit process, may be delayed compared to May’s initial plan as most parliamentarians are in favor of remaining within the EU.



As can be observed from the chart, the pair USDJPY has resumed its uptrend after crawling back from near 104.100 handle. Recent candles have long lower shadows and nearly no upper shadows, which suggested that the pair may have bottomed out. Bulls which are still dominating the market, have stepped in to support the pair from lows. The fact that %K line has crossed over the %D line from below has consolidated upbeat moves.

Trade suggestion

Buy Digital Call Option from 103.650 to 104.100 valid until 20:00 GMT October 12, 2016


The Aussie pulled back from near 38.2% retracement but the upside seem limited as the pair is struggling with two MAs lingering above the price action. Lower lows since the end of September and consistent reversals upon coming up against the moving averages have indicated strengthening bears. RSI is close to the 50 line and is likely to pull back like it did on Monday. The support at 38.2% level is within sight.

Trade suggestion

Buy Digital Put Option from 0.75750 to 0.75300 valid until 20:00 GMT October 12, 2016


GBPNZD has been under heavy downward pressure exerted by the two MAs placed above the price action. The short-term MA20 that forced the pair to reverse lower yesterday, continued to push the pair lower today. With the RSI remaining in bearish territory and pointing towards the oversold zone, GBPNZD is expected to test the low at 1.71400 again.

Trade suggestion

Buy Digital Put Option from 1.73050 to 1.71400 valid until 20:00 GMT October 12, 2016


Brent crude extended its rally after the price fell from one-year highs at around 53.72. Thanks to the dynamic support from the MA20, the market pulled back again and is heading upwards to re-attempt the resistance at 53.36 which is the 61.8% Fibonacci level where it had to give up its strength and reverse lower. Along with the stochastic chart that has shown the convergence of the %K line and %D line, the ADX chart where ADX index surged above 20 are factors consolidating the uptrend.

Trade suggestion

Buy Digital Call Option from 52.70 to 53.35 valid until 20:00 GMT October 12, 2016

Natural Gas

Having soared above the 38.2% retracement at 3.187 to as high as 3.300, Natural gas trimmed its rally as the one way move may have exhausted bulls for now. Too many buyers created an overblown market vulnerable to reversals, as everyone who wanted to buy may have already bought. Sellers, therefore, jumped in and pushed the price back down. But as can be seen from the chart, all of the recent candles have closed at the same/similar levels, which suggested that bears could not dampen the price lower. Hence, this may be a possibility for a reversal back into an uptrend.

Trade suggestion

Buy Digital Call Option from 3.230 to 3.300 valid until 20:00 GMT October 12, 2016


Euro Stoxx 50 has generally been following an uptrend supported by a couple of moving averages hovering below the price action. The index has reversed consistently after hitting highs, but we can observe higher highs and higher lows, which suggests that buyers are the overwhelming force currently. As the RSI index has bounced back from the dividing line between bullish and bearish territory, Euro Stoxx 50 may re-attempt the high at 3061.00 logged on September 22nd.

Trade suggestion

Buy Digital Call Option from 3030.00 to 3061.00 valid until 20:00 GMT October 12, 2016

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